- Bitcoin’s market share rose to 59.1% despite a decline of 11.8%.
- Ethereum’s gains from 2024 were wiped out in the first quarter of 2025.
- DeFi TVL fell 27.5% across multichain platforms.
The global cryptocurrency market began 2025 with optimism, driven by expectations of favorable policy shifts under President Donald Trump and a strong rebound in meme coins.
However, those hopes were disappointed. According to CoinGecko’s latest quarterly report, total crypto market capitalization fell 18.6% in the first quarter of 2025, shedding roughly $633.5 billion in value.
Trading volume was also affected. The report shows average daily trading volume declined 27.3% compared with the prior quarter. Spot trading on centralized exchanges fell 16.3%, a drop partly attributed to the hacking incident at Bybit earlier this year.
Despite signs of strength in early January, recession fears and fragmented investor interest prompted widespread selling of digital assets.
Bitcoin outperforms altcoins but still drops 11.8%
Bitcoin maintained overall market dominance in the first quarter, accounting for 59.1% of total crypto market capitalization—its highest share since 2021.
This shift highlights how investors treated Bitcoin as a relatively more stable asset compared with altcoins during periods of uncertainty.
Still, Bitcoin was not immune to losses. It fell 11.8% over the quarter and underperformed traditional safe-haven assets such as gold and U.S. Treasury bonds.
The report also noted that tariffs recently imposed by the Trump administration caused volatility in the bond market, affecting yields—a key metric closely linked to digital asset flows.
Ethereum experienced an even steeper reversal. It lost all of its 2024 gains and returned to levels last seen before the Shanghai upgrade. The report attributed this trend to declining decentralized finance (DeFi) activity and persistent concerns about gas fees and scalability.
DeFi TVL and Solana activity decline sharply
Multichain DeFi protocols suffered significantly: total value locked (TVL) fell 27.5% over the three-month period.
Solana, which led the decentralized exchange (DEX) trading space during the meme-coin frenzy in January, saw its own TVL drop by more than 20%.
CoinGecko data indicate that market enthusiasm around Trump-themed tokens—particularly the TRUMP token on Solana—caused a temporary spike in trading volume. However, that activity failed to sustain investor interest beyond January.
The LIBRA scandal that emerged shortly afterward added further pressure on altcoin sentiment and liquidity.
Despite these setbacks, Bitcoin exchange-traded funds (ETFs) recorded $1 billion in new inflows during the first quarter.
Yet assets under management (AUM) for these ETFs still fell by nearly $9 billion due to price declines, underscoring the gap between investment inflows and market returns.
Structural concerns deepen
While some data suggested limited resilience, almost every positive trend in the report came with downside risks.
The report shows that centralized exchanges, stablecoin volumes, and DeFi applications all registered lower activity in February and March. Many projects lost momentum as macroeconomic worries rose and investors grew more cautious.
CoinGecko noted that the first quarter of 2025 represents one of the most challenging periods for cryptocurrencies since the collapse of FTX in late 2022.
The report reflects broader market concerns that, despite structural improvements in infrastructure and compliance, the crypto sector remains highly vulnerable to global economic crises.
As recession fears persist and regulatory uncertainties continue to loom over major markets, the path forward for cryptocurrencies in the coming months remains highly uncertain.
Although Bitcoin’s growing market share signals a flight toward perceived safety, the market as a whole will likely need more than optimism and meme-coin rallies to recover the losses suffered this quarter.